Have you see this posted on Facebook, Pinterest, or Twitter? Surely you’ve seen it by now, it seems everyone I know is sharing it like it’s a magic diet pill for your finances. We all know diet pills don’t work and while this challenge may work, it’s just silly.
The premise is this…
Week 1 you deposit $1 into a jar
Week 2 you deposit $2 into the jar
Week 3 you deposit $3 into the jar
Week 4 you deposit $4 into the jar
…all the way until week 52 where you deposit $52 into the jar. At this time you’ll have saved $1,378.00.
In case you care what my opinion is on the subject…
I think this is a bit silly for a myriad of reasons, but for starters how do you know come 11+ months from now you’ll have an extra $200/month to deposit into the jar? If you have that much now, why not start saving the $52/week right right away? This is way more complicated than it should be because each and every week will be a different amount. My guess is that many people will fall off the wagon half way through the year. This is a band-aid and not a solution for financial irresponsibility. There I said it. This is for people who can’t manage their money and find themselves broke at the end of the year. Which isn’t YOU. You are here because you know how to live frugally or you’re learning how – way to go!
If you budget money for all of your expenses on a monthly basis, you will have the money in place for all of life’s needs. Christmas budget, car maintenance, back to school clothes, etc. Think of budgeting (we suggest the envelop budget method) like stockpiling toothpaste – when you need it, it will be there. When your radiator explodes (do they do that?) then you’ll have the money that has been building up in your car maintenance envelope to take care of the problem.
What do I suggest doing instead of the 52 Week Money Challenge?
FIRST set aside a percentage of your income each and every month to be automatically drafted out of your bank account into your savings account. When you have an emergency fund in place ($1000 minimum) and IF you are debt free then start investing your money. But this $1, $2, $3 a week thing is for the birds in my opinion. If your family makes $4000/month and you put 5% into savings that’s $200/month and at the end of 12 months you’d have $2400. Or if you’re stuck on the $1,378 number then you can depositing $26.50 per week into the jar (or savings account). Either way you must ask yourself: ”What is the purpose I have intended for this money?” That is a vital part to this equation.
HOWEVER like I mentioned briefly above, it all depends on what this money is for. Is it for an emergency fund or a Christmas budget? If your money doesn’t have a purpose assigned to it there’s a much higher chance you’ll raid the funds when something unexpected comes up. You need to have 2 different things in place:
- a budget that covers your day to day and month to month expenses and
- a savings plan that will cover emergencies.
That’s it for now until you’re debt free – then invest the extra, don’t stick it in a jar.
WHO I think this will work for would be someone who is learning to get in the habit of saving but even still I’d suggest starting with a flat weekly amount and not bothering with changing amounts each and every week.
I know this is a super popular savings method that popped up seemingly out of nowhere over the past couple of months so I’d like to hear what your thoughts are. Do you disagree with my thoughts on this method? Are you in the middle of this program, if so how is it working out? I’m looking forward to hearing what you all have to say!